LEGO plans large factory in Va.
The LEGO Group, the international toymaker whose North American headquarters is based in Enfield, has announced plans to build a 1.7-million-square-foot factory southwest of Richmond, Va., that will create more than 1,760 jobs over a 10-year period.
The Danish company, which makes plastic building bricks for people to play with, announced its plans Wednesday to spend more than $1 billion over a 10year-period on the new factory. Construction of the manufacturing plant, which will be the company's first in the United States, will get underway this fall with the facility scheduled to begin operating during the second half of 2025.
A temporary packaging site will open in an existing building nearby in early 2024, according to company officials, and create up to 500 jobs.
Connecticut officials weren't immediately available for comment on Thursday regarding the company's announcement.
Jennifer MacDonald, a company spokeswoman, said the decision to site the new factory in Virginia “will have no impact on the size and scope of our Enfield headquarters.”
Niels Christiansen, CEO of LEGO Group said a variety of factors made Chesterfield County, Va., an attractive location for the new facility.
“We are looking forward to making LEGO bricks in the U.S., one of our largest markets,” Christiansen said. “The location in Virginia allows us to build a solar park which supports our sustainability ambitions and provides easy links to country-wide transportation networks. We are also looking forward to creating fantastic employment opportunities for the people of Virginia.”
The company's commitment to Connecticut was reaffirmed in a conversation between Gov. Ned Lamont and LEGO leadership, according to Lamont spokesman Max Reiss.
“Gov. Ned Lamont spoke with senior leadership of LEGO earlier (Thursday) and they affirmed their commitment to keep their headquarters and presence in Connecticut,” Reiss said. “It is commonplace for corporations to invest and expand in multiple states — and they do so for a wide variety of strategic reasons. LEGO has been and continues to be a fantastic partner with our state and we look forward to strengthening this relationship now and into the future.”
Wednesday's announcement has economists and Connecticut economic development experts asking whether the state was ever considered as a potential site for the mammoth factory. They also wondered whether the factory development project could be a first step toward The Lego Group moving its North American headquarters out of Connecticut.
“They better be worried,” Fred Carstensen, a professor of finance and economics at the University of Connecticut, said of state officials. “Physical proximity of a headquarters to manufacturing facilities is definitely a factor companies consider.”
Carstensen is also director of the Connecticut Center for Economic Analysis, which is part of UConn's business school. He said whether or not Connecticut was considered as a possible location for the manufacturing facility is an equally important question for state officials to be asking.
“You would think the first thing LEGO officials would have thought is ‘can we do it in Connecticut?'” Carstensen said.
MacDonald said LEGO “officials looked across the Americas at a wide range of locations for this investment.”
Carstensen said given the worldwide market LEGO has, Connecticut probably wasn't considered for the new manufacturing plant because “the state has transportation problems.”
“The absence of (significant) freight rail service and an inland port are a real problem,” he said.
Donald Klepper-Smith, an economist with DataCore Partners, said other factors may have been responsible for LEGO siting the factory in Virginia and not Connecticut.
“Economic development these days speaks to cost structures,” Klepper-Smith said. “Forty percent of your long term job growth is a function of the cost of doing business. And when it comes to Connecticut, businesses are being incentivized to look elsewhere.”
The new manufacturing facility in Virginia will be built on a 340acre site and have an onsite solar park that will produce enough energy to match the factory's requirements. The factory will be designed to operate as a carbonneutral facility, according to LEGO officials.
The new factory will be the company's seventh overall. The U.S. market is primarily supplied by a manufacturing facility in Monterrey, Mexico that will be expanded and upgraded to meet growing demand for LEGO products.
Carsten Rasmussen, chief operations officer for LEGO Group said having a new factory in Virginia will improve the company's supply chain.
“Our factories are located close to our biggest markets which shortens the distance our products have to travel,” Rasmussen said. “Our new factory in the U.S. and expanded capacity at our existing site in Mexico means we will be able to best support longterm growth in the Americas. We are fortunate to find a location where we can begin construction quickly and create temporary capacity in under two years.”
The company's factories in Europe and China are also being expanded, according to LEGO officials.
LEGO Group employs approximately 2,600 people in the U.S. where it has been operating since the 1960s.